Fresh Cut: The Magazine for Value-added Produce

Opening the Door to Foodservice Sales

Fresh Cut
November 2004

Huge opportunities await fresh-cut fruit and vegetable processors able to get their feet in the door with the ever-growing foodservice industry. The key to success rests with how well they are working with major food distributors.

Such was the feedback from a panel discussion, "Inside the Foodservice Kitchen," part of the International Fresh-cut Produce Association's (IFPA) ExecTrends 2004 conference, held Sept. 27 and 28 in Alexandria, Va.

Participating on the panel moderated by the IFPA's Sean Handerhan were: Vince Avalos, commodity manager, produce, Avendra, LLC, Rockville, Md.; Michael Sherlock, director of foodservice, Wawa Foodmarkets, Wawa, Pa.; Dick Knickerbocker, director, procurement and distribution, HMS Host Inc., Bethesda, Md.; and Richard Persaud, produce manager, Sutton Place Gourmet/Balducci's, Alexandria, Va.

Utilize Distributors
Avendra rarely buys direct from a processor, Avalos told the group. It purchases all of its products, including fresh-cut items, from distributors, and, because Avendra's clients are hotels and conference centers, the distributors must be capable of moving and adjusting to the volume needed.

"You have to be the customizer for a chef," he explained, and must be able to provide "a better solution and something to make his job easier."

Great opportunities await the innovative, he promised, because hotels are being challenged. Owners, franchise operators and accountants are all looking for ways to reduce expenses. Budgets are being "cut back to the bone," particularly in the back rooms where the food is prepared.

"You, in this audience, have a great opportunity to help us in the hospitality arena because chefs are being challenged to help improve the bottom line for their owners," he explained. "Most are public companies and have obligations to their shareholders or partners."

There are also workplace safety issues, he said. If an inspection of kitchen operations were to be conducted, the number of lacerations and injuries associated with handling bulk items would convince most chefs to stop buying bulk and accept more pre-cut.

With annual sales in the $2 billion range and expected to double over the next few years, Avendra is the largest procurement service company serving the hospitality industry in North America and the Caribbean. Much of its business is with hotel chains.

Security, Time and Space Issues
Security, necessitated by 9/11, and time and space issues are all contributing to expanded opportunities for pre-cut and ready-to-go food in the nation's airports, according to Knickerbocker of HMS Host.

Formerly known as Host Marriott Services, HMS Host is world-renowned for creating innovative concession plans in travel venues. The company operates more than 2,200 facilities at 71 airports worldwide and 97 travel plazas in the U.S. and Canada.

"Since 9/11, we have had tremendous challenges in our airport operations simply preparing food," he said. "Obviously, it is hard to prepare food when you can't use any metal utensils. We are not allowed to have knives inside security in most airports."

Even before 9/11, HMS Host was already well into converting over to processed produce, the speaker said. That effort continues to expand. Studies consistently show higher produce yields in favor of the fresh-cut route.

The advantages of using more fresh cut include labor savings, reduced storage space needs, less need for trash removal and lower insurance premiums, he said. With workers no longer cutting food by hand, there are fewer cut fingers and other accidents.

"In airports, we are particularly challenged for space," Knickerbocker said. "We have a way of taking a concept that needs 2,000 square feet and making things work in 800 square feet. Since we make our income from feeding and serving customers, we have to be very creative in the way we get food, insure quality and save on preparation."

Because of strict food safety concerns, Knickerbocker said HMS Hosts purchases its fruit and vegetable products from pre-approved sources only.

Speed of Service
Speed of service is critical to Wawa Food Markets, added Sherlock, a third panel participant. Wawa is a leading convenience store chain with more than 540 stores in Pennsylvania, New Jersey, Delaware, Maryland and Virginia. It features its own proprietary branded salad and sandwich programs.

Anything that can contribute to speed of service is helpful, Sherlock said, pointing out that pre-cut produce items can be helpful in ensuring sandwiches are prepped quickly with ingredients arriving in the units in the correct portion size. Much of his inspiration for packaging decisions is coming from the United Kingdom, which he credits as being "light years ahead of us here in the U.S."

"It's not enough to have sliced tomatoes," he explained. "They must be packaged in a convenient and disposable way so that we can drop them into a refrigerated sandwich station and then throw away the container when it is time to replenish product. We do not want to transfer product."

With the number of Wawa stores and more than 10,000 associates, safety issues have been a challenge over the past decade, particularly as crews handle lettuce and slice tomatoes and onions. Even today, cuts remain the No. 1 cause of accidents in retail deli operations, Sherlock said, although the number is declining as the switch to using more fresh-cut produce continues.

Food safety and space availability are both important issues, he said.

"Recently, we have gotten into more of a packaged presentation, what we call our express category," Sherlock explained. "We're serving cut fruit in cups and are featuring pre-made bowl salads. Five years ago, we were into bagged lettuce mixes, but things have changed. Our customers don't come in for that anymore. The demand is for immediate consumption."

Freshness Challenge
Sutton Place Gourmet/Balducci's Persaud reported that his company has begun using a new line of fresh-cut produce, including fruit, specialty fruit items and vegetables. Most fruit items are cut in-house because of issues with freshness.

"We do get excited, however, with cut vegetables in new packaging, but cut fruit coming in from outside doesn't store as well. We've experienced water separations problems," he said. Sizing also is a problem because of lack of uniformity.

"The biggest challenge I have is space," he said, expressing a concern shared by other panel members.

While there is debate in the industry whether round or square containers work better in foodservice, Persaud said he favors round because of better air circulation.

Balducci's doesn't like to bury its fruit containers in ice because they do not sell well, he said. Vertical presentations are considered more attractive and have greater eye appeal over those partially buried in ice.

Persaud said he also believes the assembly of these packages is best handled in the store, leaving open the possibility of fresh-cut fruit coming in bulk and then being readied for retail by pairing it with other products.

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